Estates & Wills & Trusts

Blended family adds wrinkles to intestacy

By Staff

Intestacy takes on an extra level of complication when blended families are involved, says Toronto trust and estate litigator Felice Kirsh.

Kirsh, a partner with Schnurr Kirsh Oelbaum Tator LLP, tells that when someone dies in Ontario, their assets are distributed according to strict rules set out in the Succession Law Reform Act (SLRA).

“Many people think the fallback position when there is no will is that the government takes the money, but that’s not actually the case. The fallback is what the SLRA says,” she explains.

According to the law, when a spouse dies, then the surviving spouse gets the first $200,000 from the estate, with the remainder divided between the spouse and the children.

The spouse gets one-third of the amount over $200,000, and the remaining two-thirds are divided equally among all the children. But if there is just one child, the spouse and child each get 50 per cent.

However, the SLRA does not take into account the individual circumstances of the deceased, which can lead to problems, especially if the deceased didn't have a conventional family arrangement.

For instance, Kirsh says the stepchildren of the deceased in a blended family are not entitled to anything under intestacy, regardless of the strength of the relationship that existed between them.

“You could have been raising a child as your own since she was two years old, but if you never adopted her, then she’s not your child under the SLRA,” she says. “This person that you think of as your child gets nothing if you die without a will.”

In addition, the SLRA dictates that a spouse, including a common-law spouse, has the first right to be appointed as estate trustee.

Common-law partners are able to gain an appointment as estate trustee under the SLRA, but they do not share in the distribution of the estate in an intestacy, Kirsh explains.

“Many people are shocked to find that you can be a trustee but not get a penny,” she says.

An individual’s remarriage can also be the cause of an intestacy, since in Ontario, marriage automatically revokes any will that either spouse had in place before tying the knot.

“Very few people know this, which is not surprising,” Kirsh says.

She says the additional complexity of intestacy in blended family situations, and the potential for upset among those left behind is reflected in the cases that are prevalent in estate litigation.

“I would say much of the estate litigation in Ontario arises because of a second marriage,” Kirsh says.

However, testators can avoid many of these problems by consulting a lawyer to draw up a will that reflects their intentions for the distribution of their assets, she says.

“It’s better to deal with all of this beforehand, rather than letting the SLRA decide what happens to your estate,” Kirsh says.

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